The following discussion and analysis should be read in conjunction with the
financial statements and related notes included elsewhere in this Annual Report
on Form 10-K. This discussion contains forward-looking statements reflecting our
current expectations, estimates and assumptions concerning events and financial
trends that may affect our future operating results or financial position.
Actual results and the timing of events may differ materially from those
contained in these forward-looking statements due to a number of factors,
including those discussed in the sections of this Annual Report entitled "Risk
Factors" and "Forward-Looking Statements" and elsewhere in this Annual Report on
Form 10-K.
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Overview
We are a blank check company formed under the laws of the state of Delaware on
April 1, 2021, for the purpose of effectuating a merger, capital stock exchange,
asset acquisition, stock purchase, reorganization or other similar business
combination with one or more businesses ("business combination"). We intend to
effectuate our business combination using cash from the proceeds of our IPO, our
capital stock, debt or a combination of cash, stock and debt. We are an emerging
growth company and, as such, we are subject to all of the risks associated with
emerging growth companies.
As indicated in the accompanying audited financial statements, as of December
31, 2022, we had $35,275 in cash and working capital deficit of $1,860,620.
Further, we expect to incur significant costs in the pursuit of our initial
business combination. We cannot assure you that our plans to raise capital or to
complete our initial business combination will be successful.
Results of Operations
We have neither engaged in any operations nor generated any revenues to date.
Our only activities since inception have been organizational activities, those
necessary to prepare for our IPO, and, since the closing of our Initial Public
Offering, our search for business combination candidates. On August 17, 2021, we
consummated our IPO of 15,000,000 Units, as described below under "-Liquidity
and Capital Resources." Subsequent to our IPO, we have not generated, and will
not generate, any operating revenues until after completion of our initial
business combination. We have generated non-operating income in the form of
interest income on cash and cash equivalents from the proceeds of the IPO and
the Private Placement (as defined herein). There has been no significant change
in our financial or trading position since the date of our unaudited condensed
financial statements included in our Quarterly Report on Form 10-Q filed with
the SEC on November 18, 2021. We expect to incur increased expenses as a result
of being a public company (for legal, financial reporting, accounting and
auditing compliance) as well as for due diligence expenses. We expect our
expenses to increase substantially since the closing of our IPO.
Our entire activity from April 1, 2021 (inception) through December 31, 2021,
was, except as noted above, related to organizational activities and those
necessary to prepare for the IPO. Since the consummation of the IPO, our only
business activities have been searching for a target for a business combination.
As a result, we will not be generating any operating revenues until the closing
and completion of our initial business combination.
For the year ended December 31, 2022, we had total net income of $5,943,049,
which consisted of accrued income of $2,172,759 from investments in our Trust
Account and $5,866,667 of unrealized gain on fair value changes of warrants,
less $1,449,089 of operating expenses $200,000 of franchise tax expense and
$456,279 of income tax expense. The operating expenses were primarily due to
fees to professionals such as the auditors, legal counsel and consultants, and
insurance expenses.
For the period from April 1, 2021 (inception) through December 31, 2021, we had
total net income of $525,837, which consisted of a gain on change in fair value
of warrant liabilities of $2,283,333, and income earned on investments in Trust
Account of $566, offset by $1,175,244 of formation costs and other operating
expenses, a warrant offering expense of $289,574, $141,870 of offering costs
related to transferring founder shares to anchor investors, and $151,374 of
franchise tax expense.
Liquidity, Capital Resources and Going Concern
On August 17, 2021 we consummated our IPO of 15,000,000 Units at $10.00 per
share. Each Unit consists of one share of Class A common stock, par value
$0.0001 per share, and one-third of one redeemable warrant, with each warrant
entitling the holder thereof to purchase one share of Class A common stock at a
price of $11.50 per share, subject to adjustment. Certain investment funds
managed by affiliates of the Sponsor purchased an aggregate of 1,500,000 Units
in the IPO. As part of the IPO, the Institutional Anchor Investors purchased an
aggregate of $127,900,000 of Units. The IPO generated net proceeds of
$146,466,375 and offering costs of $8,703,625, which includes $3,000,000 of
underwriting fees, $5,250,000 in deferred underwriting commissions, $453,625 of
other offering costs, and an estimated additional $80,000 in other offering
expenses that will be paid (or net proceeds of $141,216,375 giving effect to
deferred underwriting commissions). No payments for offering expenses, and no
payments from the net offering proceeds, were made by us to our directors,
officers or their associates, persons owning 10% or more of any class of equity
securities of the Company or affiliates of the Company, except that offering
expenses have been funded in part by the outstanding promissory note with our
Sponsor, as disclosed above.
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Simultaneously with the consummation of the IPO, we consummated the Private
Placement of 3,333,333 Private Placement Warrants at a price of $1.50 per
Private Placement Warrant, generating total proceeds of $5,000,000, to the
Sponsor. Substantially concurrently with the closing of the Private Placement,
the Sponsor sold an aggregate of 66,666 Private Placement Warrants to the
Institutional Anchor Investors. The Private Placement Warrants are identical to
the warrants sold in the IPO, except that the Private Placement Warrants are
non-redeemable and may be exercised on a cashless basis, in each case so long as
they continue to be held by the initial purchasers or their permitted
transferees. The purchasers of the Private Placement Warrants have agreed not to
transfer, assign or sell any of the securities purchased in the Private
Placement, including the underlying shares of Class A common stock (except to
certain permitted transferees), until 30 days after the consummation of the
Company's initial business combination.
Upon the closing of the IPO and the Private Placement, a total amount of
$150,000,000 ($10.00 per share) from the net proceeds of the IPO and certain of
the proceeds of the Private Placement was placed in a Trust Account located in
the United States with Computershare Trust Company, N.A. acting as trustee. The
funds are invested only in United States "government securities" within the
meaning of Section 2(a)(16) of the Investment Company Act of 1940 having a
maturity of 180 days or less or in money market funds meeting certain conditions
under Rule 2a-7 promulgated under the Investment Company Act of 1940 which
invest only in direct U.S. government treasury obligations, as determined by us,
until the earlier of (i) the completion of a business combination and (ii) the
distribution of the Trust Account.
We intend to use substantially all of the funds held in the Trust Account,
including any amounts representing interest earned on the Trust Account,
excluding deferred underwriting commissions, to complete our initial business
combination. We may withdraw interest from the Trust Account to pay taxes, if
any. To the extent that our share capital or debt is used, in whole or in part,
as consideration to complete an initial business combination, the remaining
proceeds held in the Trust Account will be used as working capital to finance
the operations of the target business or businesses, make other acquisitions and
pursue our growth strategies.
As of December 30, 2022 the Company had $35,275 in its operating bank account
and had a working capital deficit of $1,860,620. We intend to use the funds held
outside the Trust Account primarily to identify and evaluate target businesses,
perform business due diligence on prospective target businesses, travel to and
from the offices, plants or similar locations of prospective target businesses
or their representatives or owners, review corporate documents and material
agreements of prospective target businesses, structure, negotiate and complete
an initial Business Combination.
In order to fund working capital deficiencies or to finance transaction costs in
connection with an intended initial business combination, our Sponsor or an
affiliate of our Sponsor or certain of our officers and directors may, but are
not obligated to, loan us funds as may be required. If we complete our initial
business combination, we expect to repay such loaned amounts out of the proceeds
of the Trust Account released to us. Otherwise, such loans may be repaid only
out of funds held outside of the Trust Account. Up to $1,500,000 of such loans
may be convertible into warrants at a price of $1.50 per warrant at the option
of the lender. The warrants would be identical to the Private Placement Warrants
issued to our Sponsor. The terms of such loans, if any, have not been determined
and no written agreements exist with respect to such loans. We do not expect to
seek loans from parties other than our Sponsor or an affiliate of our Sponsor as
we do not believe third parties will be willing to loan such funds and provide a
waiver against any and all rights to seek access to funds in our Trust Account.
In connection with the Company's assessment of going concern considerations in
accordance with Financial Accounting Standard Board's Accounting Standards
Update ("ASU") 2014-15, "Disclosures of Uncertainties about an Entity's Ability
to Continue as a Going Concern," the Company has until August 17, 2023, to
consummate the initial Business Combination. It is uncertain that the Company
will be able to consummate the initial Business Combination by this time. If a
business combination is not consummated by this date, there will be a mandatory
liquidation and subsequent dissolution of the Company. Management has determined
that the liquidity condition and mandatory liquidation, should a business
combination not occur, and potential subsequent dissolution, raises substantial
doubt about the Company's ability to continue as a going concern. No adjustments
have been made to the carrying amounts of assets or liabilities should the
Company be required to liquidate after August 17, 2023. The Company intends to
complete the initial Business Combination before the mandatory liquidation date.
However, there can be no assurance that the Company will be able to consummate
any business combination by August 17, 2023.
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Off-Balance Sheet Arrangements
We did not have any off-balance sheet arrangements as of December 31, 2022.
Commitments and Contractual Obligations
Administrative Services Agreement
On August 12, 2021, we entered into an Administrative Services Agreement
pursuant to which we have been paying our Sponsor or an affiliate of our Sponsor
a total of $10,000 per month, and will continue to pay this amount for up to 24
months in total, for administrative and support services. Upon completion of our
initial business combination or our liquidation, we will cease paying these
monthly fees.
Registration Rights
The holders of the Founder Shares, Private Placement Warrants and any warrants
that may be issued upon conversion of the Working Capital Loans (and in each
case holders of their component securities, as applicable) will be entitled to
registration rights pursuant to a registration rights agreement to be signed
prior to or on the effective date of the Initial Public Offering, requiring the
Company to register such securities for resale (in the case of the Founder
Shares, only after conversion to our Class A ordinary shares). The holders of
the majority of these securities are entitled to make up to three demands,
excluding short form demands, that the Company register such securities. In
addition, the holders have certain "piggy-back" registration rights with respect
to registration statements filed subsequent to the consummation of a Business
Combination and rights to require the Company to register for resale such
securities pursuant to Rule 415 under the Securities Act. The Company will bear
the expenses incurred in connection with the filing of any such registration
statements.
Underwriting Agreement
The Company granted the underwriter a 45-day option to purchase up to 2,250,000
additional Units to cover over-allotments at the Initial Public Offering price,
less the underwriting discounts and commissions.
The underwriter was paid a cash underwriting discount of 2.00% of the gross
proceeds of the Initial Public Offering, or $3,000,000, in connection with the
Initial Public Offering. In addition, the underwriter is entitled to a deferred
fee of three and half percent (3.50%) of the gross proceeds of the Initial
Public Offering, or $5,250,000. The deferred fee will become payable to the
underwriter from the amounts held in the Trust Account solely in the event that
the Company completes a Business Combination, subject to the terms of the
underwriting agreement.
The underwriter's over-allotment option was not exercised and expired on
September 26, 2021.
Critical Accounting Estimates
This management's discussion and analysis of our financial condition and results
of operations is based on our financial statements, which have been prepared in
accordance with GAAP. The preparation of our financial statements requires us to
make estimates and judgments that affect the reported amounts of assets,
liabilities, revenues and expenses and the disclosure of contingent assets and
liabilities in our financial statements. On an ongoing basis, we evaluate our
estimates and judgments, including those related to fair value of financial
instruments and accrued expenses. We base our estimates on historical
experience, known trends and events and various other factors that we believe to
be reasonable under the circumstances, the results of which form the basis for
making judgments about the carrying values of assets and liabilities that are
not readily apparent from other sources. Actual results may differ from these
estimates under different assumptions or conditions. The Company has identified
the following as its critical accounting estimates:
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Warrant Liabilities
The Company accounts for the Warrants as either equity-classified or
liability-classified instruments based on an assessment of the specific terms of
the Warrants and the applicable authoritative guidance in Financial Accounting
Standards Board ("FASB") Accounting Standards Codification ("ASC") 480,
"Distinguishing Liabilities from Equity" ("ASC 480"), and ASC 815, "Derivatives
and Hedging" ("ASC 815"). The assessment considers whether they are freestanding
financial instruments pursuant to ASC 480, meet the definition of a liability
pursuant to ASC 480, and meet all of the requirements for equity classification
under ASC 815, including whether the Warrants are indexed to the Company's own
common shares and whether the holders of the Warrants could potentially require
"net cash settlement" in a circumstance outside of the Company's control, among
other conditions for equity classification. This assessment, which requires the
use of professional judgment, is conducted at the time of issuance of the
Warrants and as of each subsequent quarterly period end date while the Warrants
are outstanding.
For issued or modified warrants that meet all of the criteria for equity
classification, such warrants are required to be recorded as a component of
additional paid-in capital at the time of issuance. For issued or modified
warrants that do not meet all the criteria for equity classification, such
warrants are required to be recorded at their initial fair value on the date of
issuance, and each balance sheet date thereafter. Changes in the estimated fair
value of liability-classified warrants are recognized as a non-cash gain or loss
on the statements of operations. The fair value of the Private Warrants were
estimated using a Monte Carlo simulation model-based approach. The measurements
of fair market value of the Public Warrants were initially estimated using a
Monte Carlo simulation model-based approach. As of December 31, 2022 the Public
warrants are calculated based on the market price of the Public Warrants, which
trade under the ticker symbol APMIW (See Note 10).
JOBS Act
The JOBS Act contains provisions that, among other things, relax certain
reporting requirements for qualifying public companies. We qualify as an
"emerging growth company" and under the JOBS Act will be allowed to comply with
new or revised accounting pronouncements based on the effective date for private
(not publicly traded) companies. We are electing to delay the adoption of new or
revised accounting standards, and as a result, we may not comply with new or
revised accounting standards on the relevant dates on which adoption of such
standards is required for non-emerging growth companies. As a result, our
financial statements may not be comparable to companies that comply with new or
revised accounting pronouncements as of public company effective dates.
Additionally, we are in the process of evaluating the benefits of relying on the
other reduced reporting requirements provided by the JOBS Act. Subject to
certain conditions set forth in the JOBS Act, if, as an "emerging growth
company," we choose to rely on such exemptions we may not be required to, among
other things, (i) provide an auditor's attestation report on our system of
internal controls over financial reporting pursuant to Section 404, (ii) provide
all of the compensation disclosure that may be required of non-emerging growth
public companies under the Dodd-Frank Wall Street Reform and Consumer Protection
Act, (iii) comply with any requirement that may be adopted by the PCAOB
regarding mandatory audit firm rotation or a supplement to the auditor's report
providing additional information about the audit and the financial statements
(auditor discussion and analysis), (iv) disclose certain executive compensation
related items such as the correlation between executive compensation and
performance and comparisons of the CEO's compensation to median employee
compensation and (v) comply with the requirements of holding a nonbinding
advisory vote on executive compensation and stockholder approval of any golden
parachute payments not previously approved. These exemptions will apply for a
period of five years following the completion of our IPO or until we are no
longer an "emerging growth company," whichever is earlier.
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